Founded by Bevan Slattery, NextDC (NXT) is an Australian data centre operator, with 11 data centres around Australia.

“We update our numbers to reflect NXT’s recently announced 1-for-6 capital raising,” Raymond said.

“If we simply dilute our share count to reflect new capital raised, our discounted cash flow (DCF) based price target would reduce approximately 15%.

“However, with additional capital comes a faster build (and assumingly a faster fill profile), which means we bring forward our capex and, lagging that, our free cash flow (FCF) forecasts. Our price target on a net basis moves to $19 (from $20).

“Our modelling assumes it takes approximately 15 years to fill the currently planned facility and that NXT doesn’t raise additional equity as it can cashflow fund the slower growth.

“That said, we think this is unlikely,” Raymond said.

NextDC (NXT)

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